Share Premium Account


DEFINITION of 'Share Premium Account'

Usually found on the balance sheet, this is the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share.


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BREAKING DOWN 'Share Premium Account'

The share premium account may be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

  1. Balance Sheet

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  2. Premium

    1. The total cost of an option. 2. The difference between the ...

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  4. EBITA

    Earnings before interest, taxes and amortization. To calculate ...
  5. Profit and Loss Statement (P&L)

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  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the ...
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  1. What are the IRS regulations regarding a share premium account?

    A company's share premium account – also known as the capital surplus or additional paid-in capital – is more regulated by ... Read Full Answer >>
  2. How can an investor determine a company's annual return from looking at its financial ...

    The funds in a share premium account cannot be used for a company's general expenses. These funds are restricted in terms ... Read Full Answer >>
  3. What sectors are best for an investor seeking a high annual return?

    A company receives a share premium whenever it receives money in excess of the face value (par value) of its shares. Corporations ... Read Full Answer >>
  4. How does a share premium account appear on a balance sheet?

    A share premium account shows up in the shareholders’ equity portion of the balance sheet. The share premium account represents ... Read Full Answer >>
  5. Are dividends considered an asset?

    Whether dividends paid on stock are considered an asset depends on which role you play in the investment: the issuing company ... Read Full Answer >>
  6. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>

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